Thursday, February 28, 2013

Community college graduates out-earn bachelor's degree holders reports that 30% of Americans with an associate's make more than those with a bachelor's degree. Associates degrees at community colleges have the added benefit of costing less both on an annual basis and in total. However, the article does point out that while people with bachelor's degree make an average of $500,000 more over a lifetime than those with with an associate's degree.

Give numbers of bachelor's degree graduates with high student debt and no/low paying jobs, getting an associate's degree first, working and then getting a bachelor's degree may be a prudent financial choice.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or education advice. Please consult a professional advisor.

Wednesday, February 27, 2013

In a recent seminar, I was reminded of the importance of protecting our principal against losses. The table below show the amount of gain needed to recover a loss.

Importance of Principal Preservation

Decline

Gain to Break Even

-10%

11%

-30%

43%

-50%

100%

-70%

233%

So a 10% loss only requires an 11% gain to break even, which is doable. However, as losses grow, the gain needed to break even grow even faster. For example a 30% loss requires a 43% gain to recover the loss. When there is a 50% loss, a 100% gain is needed, which is extremely difficult to do.

That's why it's important to minimize losses. Big declines require prohibitively large gains to recover what was lost.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

Tuesday, February 26, 2013

Welcome to the one hundred fifteenth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

Investing

Dividends4Life presents 14 Stocks Taking Their Dividends Up A Notch posted at Dividend Growth Stocks, saying, "Throughout history there have always been great companies that stand head-and-shoulders above their peers and the competition. They are loved by their shareholders, hated by the competition and known by all. Just as all great companies have something in common, great dividend companies also have something in common. All great dividend companies have at least one characteristic in common – they consistently raise their dividends each year..."

John Schmoll presents 4 Reasons Why Having an Investment Plan Will Save Your Butt posted at Frugal Rules, saying, "Investing in the stock market can be difficult for many, especially if they have no plan in place. An investment plan can help guide your investing decisions so you’re working smarter and not harder, which will in turn help your long term investing approach."

Bryan presents House Poor – How Much Home Can I Afford? posted at Gajizmo, saying, "Don't be "house poor" - it's a common mistake and one of the simplest things people do to avoid destroying their personal finances. A mortgage is probably an American family's largest monthly expense, and it likely won't be paid off anytime soon, so purchasing a home you can afford and still have money left over to invest is essential to your ability to build wealth and a retirement nest egg."

Monday, February 25, 2013

Surprisingly, I have heard as much blaming for the sequestration, especially with it being only a few days away. Maybe, I've become jaded to the political posturing. Maybe, the politicians are working together on a solution. Maybe, a 2.4% spending reduction just doesn't really matter, even though the White House has implied that essential (instead of non-essential) services would be cut first.

My main interest is in the potential impact of sequestration on the stock market. At this point, I don't know whether sequestration will be a positive or a negative. So I'm just going to guess the effect will be negative and continue to sell my stocks that are doing well and wait for a near term buying opportunity.

For reference, my batting average for being correct on an event driving market direction is less than 50%. So contrarians may want to take the opposite view :-)

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Sunday, February 24, 2013

Bernanke's Challenge: Prime Markets for the End of QE reports on the difficult task of informing investors and the market of the transition out of QE. Doing it poorly could significantly disrupt the stock markets. Doing it well could still disrupt the market. It may be a no win situation for Mr. Bernanke and the Fed.

In addition, Mr. Bernanke is expected to step down at the end of his term in January 2014, meaning that his successor will be responsible for the QE wind down. Based on my recollection, the markets have been more volatile and negative during the transitions of Fed chairs. I don't expect this transition to be any different from previous ones.

2013 may be the final year for the current bull market.

For more on New Beginnings, check back every Sunday for a new segment.

Saturday, February 23, 2013

The recent economic contraction and the upcoming sequester have highlighted for me how government thinks and acts differently when it comes to financial decisions. Here are some noticeable differences.

Economic contraction - With the Great Recession of 08/09, most middle class people cut back on spending and borrowing, either because of necessity or as a precaution to preserve funds. The government took the opposite approach by increasing spending via borrowing more money.

2% spending reduction - With the expiration of the payroll tax cut, the middle class has experienced a 2% reduction in income and, therefore, spending. The middle class solution is to cut back in a non-essential area, e.g. eating out, entertainment or luxury items. With the sequestration, the government will experience a 2.4% spending reduction. The government solution is to cut back essential services. For example, President Obama has already warned that sequestration will cause a reduction in teachers and firemen, which I don't understand since these position are funded by local and not federal taxes.

I know if I handled my finances like the government, I would soon be on a path to bankruptcy. But then again, the government can print more money when it needs it.

For more on Reflections and Musings, check back every Saturday for a new segment.

Friday, February 22, 2013

Due to my health situation, the employer for my part time job has allowed me to set my own working hours for the past two months. My employer has been very gracious to allow me to do so. I have enjoyed working an appointment only basis for limited hours. In addition, I think I have been more productive since I have been very focused in the few available work hours.

However, I know this can't last forever. As my recovery has progressed, I'm moving back to a more regular work schedule. So, it won't be long before my perfect retirement work situation ends.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or work advice. Please consult a professional advisor.

Thursday, February 21, 2013

When I was a child, a million dollars was a lot of money. Back then, someone with a million dollars would be rich. A million dollars would earn $50,000 a year at 5% interest, which once could easily live on since the median family income of $6,900. I don't think we knew anyone that was a millionaire, i.e. someone that had a net worth of a million dollars.

Due to inflation, a million dollars isn't worth as much today. A million dollars earns only $10,000 at 1% interest, compared to the 2012 median family income of $50,500. Today, housing prices are much higher than when I was a child. For example, the house my parents owned when I was a child cost $28,000. That same house has an estimated value of $333,000 according to Zillow.com. So accumulating a million dollars in net worth is more achievable nowadays. Finally, I know lots everyday people who I estimate have over a million dollars in net worth.

Perhaps, the new benchmark for being wealthy is having 10, 50 or 100 million dollars. While I know some company executives that may have 10 million dollars in net worth, it is not likely I know anyone with 50 or 100 million dollars in net worth, which would make those values equivalent to being a millionaire when I was a child.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or wealth advice. Please consult a professional advisor.

Wednesday, February 20, 2013

Like many others, I expect the stock market to pull back soon. There has been a terrific stock market rally for the past couple months and the upward trend will likely pause soon. In addition, some sectors like small cap biotechs, retail and gold are already starting to decline.

For now, I expect the decline will be short and shallow. My challenge will be to make some purchases after the decline starts since the main fear is the market will fall significantly further. To overcome the challenge, I will focus on buying more in stock for positions that I have partly purchased or that I have sold at the top of the trading channel. That way, I will be increasing my stake at a lower price than if I had made the purchase all or once, or buying back a good stock at a lower price than when it was sold.

In addition, I may take the opporutunity to put funds in a managed account or to create an ETF portfolio if there is a significant correction.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Tuesday, February 19, 2013

Welcome to the one hundred fourteenth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

Investing

Dividends4Life presents 15 Stocks Not Missing Their Opportunity To Increase Dividends posted at Dividend Growth Stocks, saying, "In everything we do, we always want to be the best or be associated with the best. You never hear fans yelling, ‘We’re number 2, we’re number 2′, while holding two fingers in the air. The same is true when selecting dividend stocks. One attribute of the very best dividend stocks is a long history of consecutive dividend increases..."

Bryan presents Best Short Term Investments posted at Gajizmo, saying, "Even multi-billion dollar corporations are always trying to maximize the returns of their short term cash and investments, so why shouldn't you? Here is a comprehensive list of all your short term investment options, from money market market accounts and Treasuries to "I-Bonds" and property tax certificates. Find where you feel comfortable parking your cash for the short-term."

William presents Zero-based budgeting for your household posted at Card Guys Blog, saying, "If you have tried to reign in your spending and get control of your unwieldy household finances, but still the credit card balance and other loans are heading upwards, you might be ready for a tool many governments and companies have used successfully – zero-based budgeting."

Retiring

Super Saver presents Remaining Cautious with Retirement Savings posted at My Wealth Builder, saying, "Our retirement savings have benefited from the late 2012 to early 2013 stock market rally. However, if something seems too good to be true, it probably is. The market rally of the past few months falls into this category. br />

Taxes

Jason presents Best Online Tax Preparation Software posted at WorkSaveLive, saying, "To take the guesswork out of which online tax software is right for you, we've taken a tremendous amount of time to examine the best and most popular online tax preparation companies to determine which has the best software for your particular tax situation See the differences between TurboTax, H R Block, TaxACT, and FreeTaxUSA"

David de Souza presents Which countries pay the most tax? posted at Tax Credits, saying, "If you think that you pay too much tax in the US you should compare what you pay to other countries in the world. This blog post looks at which countries pay the highest tax."

Monday, February 18, 2013

While the recent market rally improved our financial situation, I am skeptical about the sustainability of the uptrend. I expect that there will be a significant pullback in the next couple weeks as the spending cuts from sequestration become more likely to happen. To prepare for this, I am building a margin of safety in our finances to make it through a market downturn, in case the move significant. Here's what I'm doing:

Short term expense buffer. Since the 08-09 bear market, we have moved 3-5 years of living expenses into cash or cash equivalents (e.g. CDs). That way we won't need to sell stocks at a loss to cover living expenses.

Selling into the rally. We've been selling stocks in our taxable and retirement at or near the 52 week or all time highs. This will enable to take some profits, reduce our stock exposure, and buy back at a lower price if the stock market falls. I am also taking profits in our managed accounts and moving the funds to cash.

Exercising stock options. With my company stock at all time highs, I'm using the opportunity to cash in on a number of stock options, even though the expiration date is over a year away. I hope to sell all my options through the 2014 expiration dates. At this point, I have exercised about 40% of the target amount.

While these actions won't completely prevent our investment accounts from declining in a market pullback, they should enable us to establish a margin of safety that helps minimize the effects of a significant market decline.

For more on Strategies and Plans Ideas, check back every Monday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Sunday, February 17, 2013

Last week, physical gold and gold miners took a signficant hit, declining 2-3%. Gold fell to near $1600/oz. down from near $1900/oz. in mid 2011. My spouse and I have been adding a small amount of gold to our portfolio through ETFs. In addition, I've started making small purchases of some gold miners, whose stock price are near 52 week lows. Some of the gold mining stock have 2-3% dividends.

I'm making these purchases primarily as a hedge against higher inflation, which I consider very likely due to the U.S. debt and Fed QE policies. So while prices of the gold ETFs and gold mining stocks are declining, I'm able to purchase the hedge at a lower price.

For more on New Beginnings, check back every Sunday for a new segment.

Saturday, February 16, 2013

Recently, we've had two compact fluorescent lights (CFL) burnout in less than two years. This was surprising since the package claimed an 11 year life based on 3 hours of usage per day. The bulbs that burned out were probably used 20 times max a week for less than an hour each time. When I took the bulbs to a recycle, the bin was full. I doubt many of these bulbs were 11 years old.

Since CFL bulbs cost 5-10 times more that incandescent light bulbs, the faster than expected burnout will make CFLs much more expensive.
While I haven't investigated in detail, I suspect that fluorescent lights work best when left on for long periods of time, versus being turned off and on several times a day. The on/off cycling probably wears out the ballast, which is needed charge the gas.

So I have an experiment running in the master bedroom closets, where the lights are turned cycled several times a day and are not on from more than 15 minutes at a time. One closed has CFL light bulbs and the other one has incandescent light bulbs. If my hypothesis is right, the CFL light bulbs will be the first to burn out.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or lighting advice. Please consult a professional advisor.

Friday, February 15, 2013

Like many others, our retirement savings have benefited from the late 2012 to early 2013 stock market rally. However, if something seems too good to be true, it probably is. The market rally of the past few months falls into this category. Therefore, I still continue to be on the cautious side with our retirement savings and fund for our short term (3-5 year) livings expenses. While we have recovered almost all of our losses from 08/09, I still remember the feelings of despair at the bottom in 2009. I would like to avoid being there again.

Here are some reasons for my concerns:

Triple top - If the market index pulls back from the recent high, the market will likely go down. This is common indicator of a possible market decline for technical analysts.

EU sovereign debt - This lurking issue has been out of the news lately. The EU central bankers have been able to cajole markets to believe the risk is being managed. Talk can only go so far before they need to really deal with it.

U.S. exit from QE - QE has been reflating assets such as the stock market, bonds and real estate. However, QE can only be temporary and must end. The resulting credit contraction could be very negative for the economy.

On the positive side, businesses are doing well and running very lean. If the economy should expand, I expect there will be significant upside to the stock market.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Thursday, February 14, 2013

Half of recent college graduates are unemployed or underemployed according to this AP article . The reasons are: type of degree, degree inflation, and the economy.

The article reports that while those with science, health fields and teaching degrees do better, people with degrees in arts and humanities have more difficulty finding a job in their field. The increase in the number of people with a college degree has also made a college education less valuable when looking for a job. Finally, the high unemployment in the current economy makes fewer jobs available to college graduates.

That's quite a different experience than my mom and dad's generation, where a college degree created excellent career opportunities with top companies. Even for my generation, people were still able to get much better jobs after graduating from college.

Given the high cost of college, it will be important for our daughter to choose an appropriate major that will lead to a good job. Fortunately, we sill have 10 more years before our daughter has to make that decision.

For more on Crossing Generations, check back every Thursday for a new segment.This is not financial advice. Please consult a professional advisor.

Wednesday, February 13, 2013

Although I don't like the situation, there seems to be greater certainty than the past four years. Here are the areas of certainty I see:

Central bank intervention. The Fed will continue to keep interest rates low and increase asset values through targeted inflation. For example, the Fed has a stated objective to increase equity and housing prices. In Japan, the stated objective is to advance the stock market by 17%.

Social program emphasis. The President is focused on social changes versus economic changes for the country. Mr. Obama seems to have little interest in dealing with the economic issues. He is more interested in gun control, entitlement growth, and bigger government (e.g. more regulations.)

Growing government debt. Overall spending cuts are unlikely, despite all the talk by politicians. With the Fed buying debt and the increase of social programs, spending will grow which will lead to the debt growing also.

Unfortunately, this isn't the type of certainty that will lead to significant economic growth, a bullish investor sentiment and increasing housing prices. So the economic situation in the near term future will continue to be same as it has been for the past four years, especially now that I know what to expect.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

Tuesday, February 12, 2013

Welcome to the one hundred thirteenth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

Bryan presents Fun Jobs That Pay Well posted at Gajizmo, saying, "Not everyone gets to have their dream job, but if you are looking for a stress-free job with no real work, let us know if you find one, outside of collecting unemployment. Otherwise, here is a list of easy and fun jobs that pay well - better than most people would expect."

Susan Wowe presents Use Pinterest to Sell Your Affiliate Products posted at Online Business - Make Money Online, saying, "Do you know you can use the popular Pinterest - the third largest social media to make good money selling your affiliate products. How much success you can have really depends on how much time and effort you put into it. Give it a try. You don't need a website for making money online."

Insuring and Protecting

Bryan presents How To Save Money With Cheap Car Insurance posted at BudgetWays.com, saying, "Most people spend at least a thousand dollars on car insurance, and if you have kids or multiple cars, you're probably spending at least twice that. Learning how to buy the right type and amount of coverage, while applying for discounts is essential to saving yourself a few hundred dollars a year with cheap car insurance."

Investing

Dividends4Life presents 4 Higher-Yield Stocks Increasing Their Yield posted at Dividend Growth Stocks, saying, "When selecting income investments, the three most important questions to answer are : 1.) Is the investment increasing its dividend each year, 2.) Is the increase likely to continue into the future and 3.) Are you being compensated for the risk you are taking? When you answer yes to all three of the questions, you just might have found an excellent income investment..."

Daniel Long presents How to Save Money on Kids Clothes posted at hireananny.com, saying, "From the cost of diapers to the expense of extracurricular activities as kids get older, it seems as if they’re always on some new path that costs money."

Alaina Moore presents 10 Family Dinners that Cost Under $10 posted at aupair, saying, "As food prices rise and more families encounter sticker shock every time they look at price tags at the grocery store, the idea of feeding your entire family a meal that costs less than ten dollars can seem absurd."

William presents Non-Loan Reasons You Need Good Credit posted at Card Guys Blog, saying, "Even if you never get a loan, your credit may be the subject of intense interest from those who provide financial services. In some cases, you still need good credit to make the most of your money."

Nick presents How to Save Money on Rent: The Top 5 Tips posted at Making It in Today's Economy, saying, "Apartment costs in my city are borderline outrageous. I grew up in the Midwest, so I would be embarrassed to reveal to my old friends the numerical figure on my monthly rent check, but the locals here are astonished at the savings I achieve by adhering to the advice presented in the article."

Retiring

Jason presents Five Ways to Fast-Forward Your Retirement Savings posted at WorkSaveLive, saying, "While most of us dream of a comfortable retirement, very few invest enough make those dreams a reality or don’t invest anything at all – due to a lack of money available to do so There are ways that you can fast forward your retirement savings, either to make your portfolio larger than it is now, or to even get one started."

Saving

Ben presents How Much Emergency Fund Do You Need? posted at The Financial Reader, saying, "Saving an emergency fund is fundamental to building wealth and gaining financial freedom. You will hear other personal finance experts recommend how much of your living expenses you should save in a liquid savings vehicle; 3 months worth, 6 months, sometimes 12 months. But personal finance is not "one size fits all". This article poses questions you should ask yourself when determining how much of an emergency fund you really need."

Monday, February 11, 2013

During the recent market rally, my company stock has risen significantly, over 25% since mid 2012. I'm taking advantage of the gains by executing my company stock options. However, I've decided not to execute all the stock options at once. Rather, I've been executing 3-8% of the position at $1-2 increasing increments of limit prices. That way I reduce some of the risk associated with a pullback and also participate in further gains.

Of course, this approach won't get maximum profits from selling at the top. However, I long ago resigned myself to never selling at the peak :-) For me, the next best approach is to be able to sell some near the peak. So now I will sell part of a position when I think the price is near a peak. If the stock keeps going up, I will sell an additional part of the position. This continues until I run out of stock or the price starts declining.

Psychologically, this is a win/win selling approach for me. If the stock continues to rise, part of the position continues to gain. If the stock declines, then I have locked in higher profit for part of the position. Either way, I've made a good profit that validates the purchase of the stock.

For more on Strategies and Plans Ideas, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Sunday, February 10, 2013

Since late 2012, I've voluntarily started a very restrictive diet: vegetarian(except for egg whites and non-fat milk products), no nuts and seeds, and no added oils. While the change was made primarily for health reasons, a side benefit has been a significant loss of weight. I have lost a little over 10% additional pounds. As a result, I am now able to fit comfortably into clothes from a decade ago when I was just slight heavier than I am now.

Since I still have many of those clothes, which are classic styles, I will be able to recycle much of my wardrobe from that time. For me this is good news in three ways. I don't particularly like shopping for clothes and my expense for clothes should be significantly reduced. In addition, I will eliminate some clutter by determining which of the recycled clothing should be kept, donated or discarded.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or fashion advice. Please consult a professional advisor.

Saturday, February 09, 2013

Low interest rates may once again be creating asset inflation for stocks and real estate, just like in the early 2000s. This should be no surprise as asset inflation is one of the goals of the Fed via its policy of low interest and quantitative easing. Unfortunately, the question is probably when, not if, asset inflation becomes a bubble and accompanied by an ensuing crash.

To me, it feels like the markets are in the early stages of bubble formation. The market has had a choppy recovery since March 2009, which has kept many investors cautious. Lately, however, it seems people are become more positive, optimistic and bullish about the economy, stock market and housing.

Recently, almost every investor is seeing a nice return in their portfolios and that has me worried. In our case, we've seen most of our investments go up the last three months. I know our results are mainly due to a rise in the overall market, since I'm not that good of a stock picker. However, when the majority of people start thinking that stock market gains are easy, it's probably time to take profits and prepare for a significant correction. That time seems to be getting closer every day.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Thursday, February 07, 2013

When I was growing up, my parents always took special care of our expensive or valuable possessions. We only used living room furniture and china with guests, we had covers on our new car seats, and heirlooms were stored versus used. I can understand the reason. My parents were born during the depression, grew up during WWII, and had limited financial resources until their late thirties. So they wanted to be careful with the items of value they had or acquired.

While my parent's approach has preserved the heirlooms for the next generation, we didn't use (or see) many of the items while they were alive. I only remember using the fine china twice. My mom rarely wore the silver charm bracelet we gave her. My dad never used a valuable birthday gift from his relatives.

My sister and I now own all these and other heirlooms. I've decided that we'll be using the items that I received. That way we will get to enjoy using the items instead of just saving them for our daughter.
For more on Crossing Generations, check back every Thursday for a new segment.

Wednesday, February 06, 2013

I try not to be fooled by arguments that present prices in terms of a time frame that make the cost seem low. One example is life insurance for only 99 cents a day. Very affordable, who couldn't afford 99 cents? But that misrepresents the real cost of $362 per year, which may be a different decision about the purchase.

So rather that think of expenses in daily, weekly or monthly costs, I think of total or annual costs. All those cents or dollars add up to the larger annual costs. That way I can realistically compare it accurately to our other expenses and make a better financial decision.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

Tuesday, February 05, 2013

Welcome to the one hundred twelfth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

Insuring and Protecting

Bryan presents Best Car Insurance posted at My Best Car Insurance 101, saying, "Written by a former car insurance agent and broker, literally, a complete guide to buying car insurance, from details on factors that affect premiums, the different types of car insurance and when you should buy them, how to compare multiple policies, and discounts you need to apply for. This is a must-read for anyone reviewing their car insurance policy."

Investing

basit presents Fintotal Viewpoint | Measuring Returns - A Simple Technique posted at Fintotal, saying, "Measuring how well our money is doing seems trivial at first sight, but those of us who have tried will testify to what a nightmare it ends up being. A returns number is, surprisingly, very hard to find even in single products. let us look at a way to get a rough measure of returns."

Dividends4Life presents This Buffett Stock Is Back With A Vengeance, Raising Its Dividend 14% posted at Dividend Growth Stocks, saying, "This company is an American multinational diversified financial services company with operations around the world.In 2011, it was the 23rd largest company in the United States. For many years it has been a popular holding of Warren Buffett. Buffett has taken advantage of the stock's weakness by adding to his position each quarter. Who is this company? It is..."

Vytas presents Stock market crash posted at Trend, saying, "You most probably know that 1998 saw tremendous rise in Internet stocks, which led to an explosion of a bubble in 2000. 2007 saw an explosion of a housing market bubble. What bubble we are in at the moment? I do not see any. It is just ‘fools hope’ bubble. All financial system is on the verge of a global crash and market participants are buying shares like crazy. On the other hand, we should not be surprised by that as there usually are most investors on the boat just before a collapse comes. Study all major market booms and crashes and you will quickly see that tendency."

Living Frugally

Bryan presents Should I Pay Off My Mortgage Early? posted at Gajizmo, saying, "It's the beginning of the year and you are planning your finances. Will you be deciding to pay off your home in the next few years? Does it make sense to do so? Here are the pros and cons of paying off your mortgage early."

kurt@mymoneycounselor.com presents Tax Season Identity Theft posted at Money Counselor, saying, "Nearly 1 million tax returns were fraudulently filed in 2011. How can you protect yourself? Or can you?"

Monday, February 04, 2013

After brief review of our stock investments over the weekend, I've decided to continue taking profits on stocks that have gains and are near the top of their trading channel for the past six months. Although the market has rallied nicely for the past 2 months, I believe there too much complaceny and the economy is only one event (e.g. poor jobs number, debt ceiling/sequester stalemate, sovereign debt default) away from a major downward shock.

So I am further reducing our equity exposure. I may end up losing out on some profits, but I will sleep better at night.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Sunday, February 03, 2013

The Super Bowl Stock Market Indicator has predicted the stock market direction with 80% success rate. When a winner is from the old NFL league wins, the stock market will end higher. When a winner is from the old AFL league, the stock market will end lower.

This year's teams are both old NFL teams. The San Fransico 49ers are from the old NFL league. The Baltimore Ravens were originally the Cleveland Browns, which was from the old NFL league. So despite all the political uncertainty, sovereign debt uncertainty, and the lackluster economic recovery, the Super Bowl indicates the stock market will have higher finish in 2013.

For more on New Beginnings, check back every Sunday for a new segment.

Saturday, February 02, 2013

Lately, I've been noticing outstanding customer service from some of the providers that I use. The service in each case was so good that I wanted to document the experience.

Restaurant - One of our favorite places to eat is a local ethnic food restaurant. I've known the owners for thirty years and the restaurant is among our top choices for special events. On special event meals, we usually get a free desert as a gift from the restaurant. For my last birthday, the desert was put on special platter that played "Happy Birthday."

My daughter couldn't wait until her birthday for the special platter. However, the restaurant made it her birthday even a more special day. Not only did they give her a desert on the "Happy Birthday" platter. They put helium balloons on her chair, gave her a nice present, and put a double helping of her favorite appetizer in our take home order.

Needless to say, we gave the wait staff a really big tip (40%) for the great celebration.

Battery store - Early in 2012, my daughter's car started to run slower, even though the battery was supposed to be fully charged. I took the battery the the local authorized dealer, which was a battery store.
The owner explained it was likely the battery, but didn't push selling one. He checked out my battery and said it measured OK, but he couldn't be sure. He said if I bought a battery and I didn't need one he would gladly take a return. I decided not to buy one at the time.

Later, my rechargeable toothbrush stopped working and the battery was soldered in, making it very difficult to change. The owner said he would change it for only the cost of the battery and if it didn't work (which was a 50/50 chance), he wouldn't charge me. He changed it, it didn't work and he didn't charge me.

I was impressed with the service. Later on, I purchased the motorized car battery. And then I bought a laptop battery, even though it was cheaper on the Internet.

Software company - I use a well known brand name security software. Three years ago, I used the chat and remote support to correct apparent security problems. Typically, the customer service representative would determine if it was related to the software or not, but would always solve the issue. If the issue took longer than usual to solve, the representative would add a month to subscription.

Based this level of service, I've decided to stay with this security software company, even though there is freeware or cheaper software available.

In the above cases, less expensive providers are always available. However, due to the level of great service, I will continue to use their services and not shop for other providers.

For more on Reflections and Musings, check back every Saturday for a new segment.

Friday, February 01, 2013

Although I am happy and benefit from the recent stock market rally, I am also becoming more concerned about a major correction. The recent gains, particularly in my company stock, have increased our retirement savings to the peak levels achieved in late 2007, when I took early retirement. However, the question now is whether the 2007 values will represent a market top, from which correction will occur. Or whether the current market will break through to higher levels. .

After the significant losses in 2008 to 2009, I am still not yet confident enough to put the majority of our retirement savings back into equity and bond investments. Given the issues with EU sovereign debt (which the press seems to ignore nowadays), the U.S. debt crisis (which Congress and the President seem to ignore), and QE infinity by the Fed, I still believe that major correction is a high risk.

So we continue to keep about 3-5 years of living expenses in cash or cash equivalents, execute company stock options as the market rises (or near expiration), and trickling in some money into stocks, while selling some stocks to lock in gains. If the stock market continues to rise, the retirement accounts will partially benefit. If the stock market falls, our retirement savings will be partially protected.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

About Me

My wealth goal is to create a guaranteed yearly income stream equal to my highest salary for my retirement years. While I have developed a strategy to do this,
I am interested how others are thinking of achieving financial security for retirement.
This blog is a summary of facts, ideas, discussions, and action plans to achieve that goal.

Disclaimer

This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.

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Disclaimer:
This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results
based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.